The heads of agreement contains key principles of cooperation that will form the basis for the companies to establish a joint venture, if the joint study reaches a positive conclusion.

Both companies plan to create a fully integrated petrochemical complex which maximizes chemical yield, transforms and recycles byproducts, drives efficiencies of scale and resource optimization and diversifies the petrochemical feedstock mix in Saudi Arabia.

Saudi Aramco’s CEO Amin Nasser said that “this agreement will help spur a new era of industrial diversification, job creation and technology development in Saudi Arabia, particularly through downstream conversion of specialty chemicals by small and medium sized enterprises.”

SABIC’s CEO Yousef Abdullah Al-Benyan said SABIC and Saudi Aramco will diversify the country’s feedstock mix and make oil a viable petrochemical feedstock.

Consistent with Saudi Arabia Vision 2030 goals, this project will provide new opportunities toward creating a world leading downstream sector in Saudi Arabia, built on four key drivers: maximizing value from the Kingdom’s crude oil production via vertical and horizontal integration across the hydrocarbon chain; enabling the creation of conversion industries that produce semi-finished and finished goods to help diversify the economy; developing advanced technologies and innovation; and enabling the Kingdom’s sustainable development in alignment with the Kingdom’s National Transformation Program, according to Saudi Aramco.

In the U.S. downstream, Saudi Aramco has a 50% share in Motiva, which saw its refining assets divided between Saudi Aramco and Shell. Saudi Aramco’s SATORP refinery in Jubail, Saudi Arabia, is a regular distillates exporter to Europe. Besides domestic refineries and Motiva, Saudi Aramco has joint-venture refineries around the world.

SABIC is a major chemical company, with market presence in more than 50 countries and employs a workforce of over 40,000 people.